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Tickers in this Article: CNW, SAVE, ODFL, ALGT, FWRD, SSW, JBHT
On a good day for the market, the Nasdaq has climbed 0.1%, the S&P 500 has moved up 0.5% and the Dow is up 0.4%. The transportation sector is a category of stocks relating to the transportation of goods or customers. It is made up of airlines, railroads and trucking companies. The performance of the transportation sector is sensitive to the price of oil. Because operations revolve around the use of vehicles, fuel prices represent a significant cost to transportation companies. As the price of oil rises, transportation companies will be expected to earn less. Inversely, these companies do well when the cost of fuel decreases.

The Transportation sector (IYT) is down 1.8% on a good day for the market overall. The biggest movers in the sector so far are:
CompanyMarket CapPercentage Change
Con Way Inc (NYSE:CNW)$1.99 billion-15.8%
Spirit Airlines Incorporated (Nasdaq:SAVE)$1.46 billion-5.6%
Old Dominion Freight Line (Nasdaq:ODFL)$2.44 billion-5.4%
Allegiant Travel Company (Nasdaq:ALGT)$1.36 billion-5%
Forward Air Corporation (Nasdaq:FWRD)$974.5 million-2.6%
Seaspan Corporation (NYSE:SSW)$973.1 million+2.6%
J.B. Hunt Transport Services, Inc. (Nasdaq:JBHT)$6.44 billion-2.1%
Forex Broker Summary: Forex Capital Markets (FXCM)

Taking a 15.8% hit, Con Way (NYSE:CNW) is currently trading at $29.99 per share. The company's volume is currently 1.7 million shares for the day, 2.1 times the average daily volume. The trading volume for a stock indicates the level of investor interest. While investment valuation ratios are useful tools in estimating the attractiveness of an investment, remember that it is important to look at a company's historical performance and compare the company ratios with its competitors and industry overall. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). CNW's P/E ratio of 18.6 is above the industry average of 14.58. This could mean that the market is expecting big things over the next few months or years. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Investment Valuation Ratios: Price/Earnings Ratio

Spirit Airlines (Nasdaq:SAVE) has decreased to $20.31 per share, a 5.6% fall. So far today, the company's volume is 1.6 million shares. Yesterday, volume was only 573,712 shares. When a stock price moves up or down, watching the volume is a good way of identifying how significant that shift is. In making a decision about a potential or existing investment, valuation ratios are useful as a basis for seeing whether the stock price is too high, reasonable, or a bargain. The price/earnings to growth (PEG) ratio compares a company's P/E ratio to its earnings-per-share growth rate, which tells you whether or not you are getting a good value when purchasing a stock with a high price/earnings ratio (P/E ratio). SAVE's PEG ratio of 0.43 is in line with the industry average. Because of the adjustment for earnings growth rate, the PEG ratio is somewhat more useful than many formulas for comparing companies in different industries.

After a decline of 5.4%, Old Dominion Freight (Nasdaq:ODFL) has hit a share price of $40.13. With 303,143 shares changing hands so far today, the company's volume is 0.8 times its current three-month average. Volume is used to evaluate how meaningful the price movement of a stock is. Investment valuation ratios can be very useful in estimating whether a stock price is too high, reasonable or a bargain investment opportunity. The price/sales ratio measures a company's stock market value by its total revenues or alternatively, a company's price per share by its revenue per share. ODFL's P/S ratio of 1.4 is on the high side. In young companies, a high P/S ratio is a sign of sales growth that is expected to turn into earnings and cash flow. It is important to keep in mind when looking at the P/S ratio that just because a company is generating revenues, this does not mean that the company is profitable, and in the long run, profits drive stock prices.

Allegiant Travel (Nasdaq:ALGT) is down 5% to reach $67.50 per share. So far today, the company's volume is 81,417 shares. If a stock price makes a big move up or down, volume lets us know the significance of that move. Investment valuation ratios provide investors with an estimation, albeit a simplistic one, of the value of a stock. The price/book value ratio is calculated by dividing the current stock price by the company's book value per share. The P/B ratio for ALGT is 3.46, indicating that the stock is trading for more than its book value. This may be a sign that the company is overvalued. P/B has its shortcomings but is still widely used as a valuation metric, more relevant for use by investors looking at capital-intensive or finance-related businesses, such as banks; book value does not carry much meaning for service-based firms with few tangible assets. SEE: How Buybacks Warps The Price-To-Book Ratio

Slipping 2.6%, Forward (Nasdaq:FWRD) is currently trading at $32.58 per share. So far today, the company's volume is 19,133 shares, 0.2 times the average daily volume. Volume is an important indicator in technical analysis as it is used to measure the worth of a market move. If the markets have made a strong price move either up or down the perceived strength of that move depends on the volume for that period. The higher the volume during that price move the more significant the move. When estimating the value of a particular investment, valuation ratios provide a good basis for assessing the value of an individual stock. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. FWRD has a P/E ratio of 19.0, high compared to the industry average of 14.58. Generally speaking, the higher the P/E ratio, the higher the market expectations for a company's future performance. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: Understanding The P/E Ratio

Rising 2.6%, Seaspan (NYSE:SSW) is currently trading at $15.90 per share. The company is trading at a volume of 69,877 shares. This is on pace to reach yesterday's trading volume of 147,106 shares. Volume is an important indicator because it indicates how significant a price shift is. Investors can use valuation ratios as tools to estimate what kind of deal a particular investment is. For investors primarily interested in the income a stock can generate, the dividend yield is an important determinant of how attractive a stock is. SSW has a dividend yield of 6.5%. It is important to remember that while a higher dividend yield is more attractive, all else being equal, a higher dividend yield can also indicate greater perceived risk. SEE: Investment Valuation Ratios: Dividend Yield

J.B. Hunt Transport Services (Nasdaq:JBHT) is currently trading at a share price of $53.88, a 2.1% decline. So far today, the company's volume is 420,380 shares, 0.4 times its average over the past three months. As a stock moves up or down, it is important to pay attention to the trading volume. This indicates the level of interest: the higher the volume, the more the interest. Investors can make use of valuation ratios to estimate whether a stock is fairly valued. The price/sales ratio measures a company's stock market price by its revenues. The P/S ratio for JBHT is 1.45, which is relatively high. This could be a good sign if the share price increases. All things being equal, a low P/S ratio is good news for investors, while a very high one can be a warning sign.

The Bottom Line No matter the economic climate, Wall Street will always have stocks that make major moves each week. It is important to weigh current activity against historical performance when making any investment decisions. However, these fundamental metrics must be analyzed with historic data, industry information in addition to firm specific financial statements.

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